The much anticipated Tesla Model 3 has yet to be released and already a groundswell of electric car competition is forming to challenge Elon Musk's upcoming offering. Start in China, where the Model 3 is not due to arrive until next year, but already Chinese-funded, smart, connected plug-in car start-ups are scrambling to launch "Tesla killer" cars to go head-to-head against Tesla "mass market" sedan.

In taking on the monopoly, yet cash-burning premium electric car juggernaut that is Tesla, the key for leading Chinese electric vehicle start-ups such as Future Mobility, WM Motor and Singulato Motors, is that they will produce their cars locally, making them better able to match the Model 3's price, Reuters notes. Tesla is expected to price its Model 3 from $35,000 in the United States. Buyers in China would expect to add 25% to that in import tariffs.

The Chinese strategy is simple: beat the Model 3 in China by making their cars more premium but cheaper than Tesla's mass-market all-electric battery car.

The three start-ups see Tesla's weakness in its inability to produce cars in China, the world's leading market for plug-in cars.

Speaking to Reuters, the founders and CEOs of Future Mobility, WM Motor and Singulato acknowledged the Model 3 is the car to beat. The first vehicles they aim to launch in the next couple of years will be priced around 300,000 yuan (roughly $43,500) or below, they said ahead of the Shanghai auto show, which opens to the public on Friday. "Between 200,000 yuan and 300,000 yuan," said Singulato's co-founder and CEO Shen Haiyin.

Daniel Kirchert, president and co-founder of Future Mobility, says his company plans to launch three models. The first, a premium midsize crossover sport-utility vehicle (SUV), will arrive "before 2020", followed within three years by a sedan and a 7-seater multi-purpose vehicle (MPV).

All will be based on the same vehicle underpinning architecture and share major components, "to achieve this very attractive entry price of about 300,000 yuan," Kirchert told Reuters in a telephone interview.

"It's a bit more than $40,000, a very competitive price positioning ... because Tesla customers buying the Model 3 in China would have to shoulder the cost of a 25 percent import tariff on the car", unless it's produced in China, he said. "We will be competitive because we produce the car locally," he added.

For now Tesla has denied recent talk in China that it was considering manufacturing its cars locally. "Tesla is deeply committed to the Chinese market, however these rumors are not true," the company said. However, even without local production, Tesla will be no pushover. It this month overtook GM and Ford Motor in market value as investors focus on the "story", ignore the soaring cash burn and embrace Elon Musk's strategy of offering stylish, high performance cars that are continually upgraded (if delayed) with features that rival automakers are still only testing.

Tesla has to date competed only in premium price classes at relatively low volumes. The Model 3 will need to appeal to more price-sensitive consumers to reach its projected annual sales of 500,000 vehicles.

The Chinese automakers are winning to accept the challenge. As well as making its car in China, at a planned assembly plant in Nanjing, Kirchert said Future Mobility plans to make the SUV bigger than the Model 3 and more luxurious. "In the end, it's really about how premium you are. That's the real challenge."

Singulato Motors unveiled its first "mass-production" car, also a crossover SUV, in Beijing last week, and says it will be priced below 300,000 yuan. It has started taking pre-orders for a limited period from customers willing to put down a deposit of 2,017 yuan.

WM Motor plans to launch its first car, an electric plug-in crossover SUV, in the second half of 2018, again priced to compete with the Model 3, co-founder Freeman Shen told Reuters. The car will be the first of three electric vehicles the Shanghai-based firm plans to launch by 2020, by which time Shen says WM Motor should be selling around 100,000 cars a year.

It's not just Chinese competition that is coming: Germany's biggest carmaker Volkswagen, which plans to roll out four affordable electric vehicles in the coming years, also unveiled a battery-powered crossover at the Shanghai Auto Show. A mix between a four-door coupe and a sports utility vehicle, the new I.D. Crozz SUV is the third model which will be sold under the I.D. sub-brand.

The crossover will compete with Tesla's Model X, which the US manufacturer started delivering in 2015. According to the head of the VW marque's electric car project Christian Senger, the company has made "huge progress" in reducing production costs of its all-electric vehicles. VW has pledged that the I.D. line will cost about the same as its diesel models.

"Offering our electric cars for prices similar to combustion engine vehicles really is a game changer," Senger said. "We're using the need to step from combustion engine to electric cars to reinvent VW brand."

A full charge will give the car a range of more than 300 miles. The I.D. Crozz can be charged up to 80 percent capacity from a fast charger in just 30 minutes. The vehicle can switch to an autonomous driving mode with a push on the VW badge in the middle of the steering wheel, which then folds automatically into the cockpit. The car then maneuvers around based on signals it gets via laser and ultrasonic scanners, radar sensors, and cameras.

The I.D. line models will be partly developed in China, and will also include a mid-size sports utility vehicle, a hatchback, and a sedan.

The concept of electric cars is part of Volkswagen's new business strategy to take a leading position in the green transport niche by 2025. In the wake of its diesel emissions scandal, VW announced last year it's phasing out up to 40 vehicle models. The company pledged to invest €10 billion into ride-sharing technology, electric cars, and automated driving. The automaker said it hopes to launch 30 new electric car models within a decade.

In short: while Musk may still enjoy a near monopoly in the premium and - soon one hopes - the highly coveted mid-range EV space, the competition is rising. Meanwhile, as the WSJ calculated over the weekend, to back into its valuation, Tesla will have to quintuple the number of cars it sells, earn margins equivalent to those of its highly efficient competitors and not sell new shares." It is also priced to perfection: should any of these variables be adversely revised, be it lower sales, lower margin, lower selling price, and Tesla doesn't come close to earning enough to get to 10 times the multiple of its bigger rivals by the end of 2018.

Levi actually, diesel takes less energy to make from crude. With modern day injection systems, even my 2000 vw was smoke pretty much free and got 48 mpg hwy without sacrificing power. Gasoline engines may emit smaller particles but actually they emit more of them. Smaller particles stay in the air longer and can get deeper into our lungs.

Despite the high use of diesel in Europe (due to high energy prices), they don't have any more pollution issues than other countries that run primarily gas engines.

Electric cars are dangerous to the grid. Our electrical grid is already taxed in high demand times such as hot days, add a bunch of cars charging and it could tip the load past dangerous limits.

The battery production is also very polluting as it requires lithium which is energy intensive to mine and make into batteries.

Changing the global transportation paradigm is not that easy, nor is it cheap. Take Infrastructure for instance; Who builds the charging stations along the highways? Who trains and equips first responders to handle a crashed electric vehicle with its exposed wiring and leaking batteries? Who guarantees that the roadside devices used by self-driving vehicles for guidance are kept clean, visible and working?

It will be interesting to see how much market share the electric vehicles do achieve at their current level of technology. I suspect it will require a new generation of young drivers who have not experienced the pleasure and relative self-sufficiency of long distance driving through mud and snow in a gas engine. Me thinks I'll be hanging onto my 4 wheel drive, gasoline engine truck for as long as I can.

Without a breakthrough in energy supply department, including infrastructure to transport it, the whole electric cars business is just a wild dream. Energy prices are so high in Europe (and most of the world), and infrastructure is so overused, that any real increase in number of electric cars will be a disaster. So it will have to be regulated - by higher taxes. Which in turn will kill the electric cars market. The energy is so expensive mostly thanks to the idiotic war against CO2 emissions, but there are other reasons.

So preserve yourselves, my brothers, from the calamities of this place, for distinguishing it is extremely difficult! Souls find it sweet, and then within it they are duped, since they become completely enamored of it.

- Sufi proverb

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